vessel operators are now slow steaming
to lower capacity and save on fuel costs.
This strategy has effectively reduced capacity by four percent, and the carriers
are now suggesting an increase of $400
this spring on 40-footers moving from
the Far East to the U.S. west coast plus a
$400 surcharge for the June-November
peak season.
Many analysts, who see global trade
growing by only seven percent this year
compared to 11 percent in 2010, believe
conditions don’t sustain such increases.
Others, predicting stronger business, argue that the planned rate hikes will stick.
As always, the only certainty for container users is the need to be diligent.
als and products. For example, larger
volume gives you added clout when
negotiating container contracts.
Bottom Line: Worldwide economic
development and the recovery of the U.S.
economy are bringing opportunities for
even the smallest companies to expand
their market reach. Capturing those pro-
spective customers will depend heavily on
the cost of landing your products at their
dock. With logistics costs certain to rise
in the near term, you best concentrate on
optimizing the price tag for moving and
storing your goods. Labor and materials
are not your only costs. ❮
Reduce your costs
So what can you do to reduce or
contain your transport costs?
Consider outsourcing. Third-party
logistics specialists can assist you in
building a low-cost transportation/stor-age strategy that can respond quickly to
changing inbound/outbound demands
while minimizing your need for adding
skilled staff and investing in facilities.
Involve your carriers. In the near term
you will not find many savings in rates
alone. Collaborating with your transportation providers to identify and exploit
external opportunities is a must.
Analyze your supply chain. Look for
possible economies of scale from a reduction in the number of your suppliers
and transport providers.
Work with your customers. With your
customers often paying the freight to
their dock, an absolute must is strategiz-ing with them to implement least-cost
solutions, such as consolidating three
shipments into two.
Explore “co-opetition.” Partnering
with competitors can produce savings
in rates for storing and moving materi-
After 40 years as a consultant to
furniture, cabinetry, and millwork
producers, Art Raymond is now Vice
President – Operations at Hooker
Furniture Corporation, Martinsville,
Va. Contact him at 276/666-3965 or
araymond@hookerfurniture.com.
